Unit IV “Institutions” Review: Chapter #14 – The Congress, The President and The Budget
Assignment: Ask a question that you need assistance with and answer a question submitted by another student for each chapter in Unit IV.
Assignment: Ask a question that you need assistance with and answer a question submitted by another student for each chapter in Unit IV.
Okay, so if the government receives a surplus, why wouldn’t they just keep the extra money and put it towards our national debt?
How does the president get paid? By our taxes?
Would the budget for a new year ever decrease?
What exactly is a discretionary program?
What is the government deficit right now? Is it expected to increase or decrease?
How has the War on Terrorism affected the federal budget?
Has the government grown in the past few decades? Explain.
How does the government borrow money?
What was the prupose of Gramm-Rudman-Hollings?
What is the difference between the Congressional Budget Office and the Department of Treasury? Why does the government need both?
QUESTION: How does the government borrow money?
ANSWER: When the federal government wants to borrow money, the Treasury Department sells bonds, guaranteeing to pay interest to the bondholder. Other countries have a vested interest in the well-being of the United States because (as we’ve discussed) if the United States went under, it would bring most of the rest of the world along with it. Therefore, an investment in the United States is considered a safe investment. Countries are not the only one who can buy such bonds. Citizens, corporations, mutual funds, and other financial institutions can all purchase these bonds; there is always a lively market for government bonds. Ten percent of all federal expenditures go to paying interest on the federal debt. Government borrowing also crowds out private borrowers, both individuals and businesses, from the loan marketplace. Most economists believe that competition to borrow money increases interest rates and makes it more difficult for businesses to invest in capital expenditures (such as new plants and equipment) that produce economic growth.
What was the intention of (and the background behind) the 1935 Social Security Act?
Okay, so if the government receives a surplus, why wouldn’t they just keep the extra money and put it towards our national debt?
Debt is stimualtive. We are able to spend more on what we want, and we are the greatest consumer nation in the world. Also, we just pay the interest on our debt, and still have to borrow more money, but the countries that buy “stock” in the United States do not mind loaning us money (According to Kautzy). If America went bankrupt, than the world will, litterally go up in flames. But the coutries like China and such will never let us go under so we do not really need to focus on paying our debt off.
Also, America has ever-expanding programs for the people. You almost never cut programs, and the programs get mroe and mroe expensive each year, so we would never have excess money to spend on our debt.
If we ever had any extra money, we would probably spend it on war materials because we like being powerful.
How will the government’s ability to give student loans be affected by the economy?
If the government cuts low-interest student loans, than how will our competitiveness in the world be affected?
What are uncontrollable expenditures and do they effect the budget of an agency?
If people are worried about the budget and budget deficits, how could they reform budget assignments to deal with solving them? Does incrementalism adress this issue?
Q: What was the intention of (and the background behind) the 1935 Social Security Act?
A: In 1935, the Great Depression was going on and Franklin D. Roosevelt was in office. Congress passed the Social Security Act, which was intended to provide a minimal level of sustenance to older Americans and thus save them from poverty. Throughout time, that minimal level vanished. In the 1950’s disability insurance became part of the plan, which gave benefits to workers who had not yet retired but were disabled. Medicare was added in 1965, which provides both hospital and physician coverage to the elderly.
What are the similarities and differences between The House Ways and Means Committee and the Senate Finance Committee. What do they do?
What three things were established by the Congressional Budget and Impoundment Control Act of 1974? Explain the reasoning behind this act.
Question: What was the prupose of Gramm-Rudman-Hollings?
Answer: By 1985 all other reforms to control the budget had failed. As Reagan refused to raise taxes, the Gramm-Rudman-Hollings act was a desperate attempt made by congress to balance the budget. This act is also known as the Balanced Budget and Emergency Deficit Control Act. The legislation was amened in 1987 and mandated maximum allowable deficit levels for each year until 1993. That was the year that the budget wassuppoeto be balanced. If congress refused to meet the goals automatic across-the board spending cuts were to be put in place. These were called sequestrations. The act was abandoned in near the end of 1990.
Question: How has the War on Terrorism affected the federal budget?
Answer: The War on Terror has caused the budget deficit to grow exponentially. The spending on every day things like food for the soldiers is an uncontrolled expense, the soldiers have to eat its not something of question. And every time that a tank or Humvee is damaged in battle it costs to repair or replace and every time the tanks and Humvees need gas it costs. These things cannot really be spared, a vast majority of war costs are necessities.
How exactly would Social Security be privatized and why would it cause such an uproar with those who receive SS benefits?
What was the prupose of Gramm-Rudman-Hollings?
The purpose of the bill was to help get rid of the budget. It stated that if the government failed to meet the defecit goals it required across the board spending cuts except for on Social Security and interest on the debt.
Why does the government have so many committees that do they same thing? ie House Ways and Means Committee and Senate Finance Committee
What three things were established by the Congressional Budget and Impoundment Control Act of 1974? Explain the reasoning behind this act.
The reasoning behind it was to reform the congressional budgetary process. It forced congress to consider the budget as a whole instead of in bits and peices.
The first thing established from this act was a fixed budget on the calendar. Before this congress sometimes failed to appropriate money to agencies until after the fiscal year was over, leaving agencies without a firm budget for months. Now it is mandated that there is a completion date.
The second thing established was a budget comittee in each house. These two committees are supposed to recommend target figures to congress for the total budget size by April 1st of each year.
The third was the Congressional Budget Office. The CBO advises congress on probable consequences of its budget decisions, forecasts revenues, and is a counterweight to the presidents OMB.
What would be some problems with a balanced budget amendment?
Q: Why does the government have so many committees that do they same thing?
A: In principle they may all do the same thing but in action their duties may differ slightly. The main reason why they do not merge existing committees is because of power. The chair of one committee does not want to be usurped of their power because their committee is being merged with another. In addition, a co-chairmanship for a merged committee would also never work because politicians enjoy their power and do not enjoy sharing. As to the difference between the House Ways and Means Committee and the Senate Finance Committee, they are in two separate houses of Congress and are needed in order to deal with business in their own house.
What are the four ways the federal government gets revenue? Please describe them as well.
QUESTION: What three things were established by the Congressional Budget and Impoundment Control Act of 1974? Explain the reasoning behind this act.
ANSWER: First of all, I think we need to know what “impound” means. To “impound” something is to set aside for funds instead of spending as prescribed.
This act was established in part because Congress had previously budgeted in a piecemeal fashion (or one step at a time). A subcommittee of the House and Senate Appropriations Committees dealt with each agency budget request. These requests were then appropriated, or set aside for a specific purpose, and then added up for a total budget. This was not satisfactory because no one really could estimate how much the budget would be until all the requests were added up. The Congressional Budget and Impoundment Act of 1974 was meant to make Congress less dependent on the President’s budget, thus letting it set and meet its own budgetary goals (because the President could impound Congress’s funds). The act therefore established 1) A fixed budget calendar so that the budgetary process has an established completion date so agencies receive their money within the fiscal year. 2)A Budget Committee within each house so that there is an estimated budget size. These two committees recommend a total budget size by April 1st, and then Congress agrees on a total size by April 15th. 3) A Congressional Budget Office which advises Congress about budgetary decisions (this is a check on the Office of Management and Budget).
In addition to these three main components that the act established, it also stated that if the President impounds funds temporarily, either one of the houses can override this decision. If the President decides to impound funds permanently, however, this decision is voided unless both houses agree. This decision must be reached in 45 days.
“What are uncontrollable expenditures and do they effect the budget of an agency?”
Uncontrollable expenditures are payments that the government has to spend to certain people or the such. For example, Social Security. The government has to pay all the senior citizens their checks. No matter what. To explain further, for every dollar that the government makes, a certain portion is automatically portioned out. No one is allowed to touch that money for any other purposes other than what it’s designated for.
In contrast, a controlled expenditure is one that the government can control the use of the money. Like the money in the defense spending category. The government can choose whether or not to spend it on tanks or bombs or helicopters.
What is the purpose of the Congressional Budget and Impoundment Control Act of 1974?
And also: explain our current tax brackets. I think I’m not being placed in the right one and I’m paying too much.
What would be some problems with a balanced budget amendment?
A major concern is that a balanced budget amendment would lack an effective enforcement mechanism. Through loopholes, the government could avoid truly balancing the budget by extending due dates or playing with spending. Also, many balanced budget proposals seem to favor dramatic tax hikes over cuts in spending. Another major concern is the fact that it is almost impossible to project America’s annual spending. Our country’s economy is heavily impacted by foreign economics, national security, natural disasters, and other factors over which we have no control. Forcing a balanced budget could push us into a state of crisis, either leading to a dramatic jump in taxes or a noticeable cut in government funded programs.
What is the difference between an authorization bill and an appropriations bill?
What are the four ways the federal government gets revenue? Please describe them as well.
1.) Income Tax: individuals are required to pay the government a portion of the money they earn. The 16th amendment allows for Congress to establish an income tax. This tax is collected by the Internal Revenue Service. It is progressive in that those with a higher income pay high rates on their income. Individual income taxes account for 50 out of every 100 cents of federal revenue. Corporations account for 10 out of every 100.
2.) Social Insurance Taxes: These are paid by employees and employers, and they are earmarked specifically to go to the Social Security Trust Fund to pay benefits to the elderly, disabled, widowed, and employed. These are the fasted growing source of federal revenue and account for 1/3 of the federal revenue.
3.) Borrowing: This occurs when the Treasury Department sells bonds which it guarantees to pay interest to the bondholder for. The Government also takes out loans from the private loan market.
4.) Taxes and public policy: The government can use this source as way to stimulate the economy and equalize incomes and vice versa.
What is the difference between Uncontrollable Expenditures and Entitlements?
What is the difference between medicare and medicaid?
Explain Tax Expidentures and the relevance to Revenue losses.
Are these losses from the result of PAYING money towards special deductions, or are they from being UNABLE TO COLLECT taxes from certain people/groups?
What are the four ways the federal government gets revenue? Please describe them as well.
The four ways the government gets revenue is 1. Income tax: where individuals are required to pay the govt. a portion of what they earn. 2. Corporate income tax: basically where corporations pay taxes like individuals. 3. Social Insurance Taxes: Both employees and employers pay this tax that is earmarked for a special purpose (i.e. retirement funds). 4. Borrowing: The treasury department sells bonds guaranteeing to pay interest to the bond holder.
Q: What is the government deficit right now? Is it expected to increase or decrease?
A: The government deficit is currently $10,892,204,395,275.02! This is according to the U.S. National Debt Clock found at http://www.brillig.com/debt_clock/.
I don’t know what experts are saying about it increasing or decreasing, but I’d guess its going to increase. You can’t cut taxes, increase paychecks, and pass a huge stimulus deal without going into more debt. Not to mention Iraq and Afghanistan are still going on. Plus, Keynesian economics tell us the government should spend more when the nation is in a depression. Look what we’re in!
Would the budget for a new year ever decrease?
I don’t foresee the budget for a new year ever decreasing, because once something is paid for one year, it is expected to be paid for again, otherwise bad talk will spur up in the nation. For example, if our government approves spending for $20 million dollars to go towards rebuilding roads every year, and then all of a sudden, it isn’t approved, the people are going to be mad. Imagine that same example, except it applies to all appropriations. If something is helped, and then later not helped, people are going to complain. It’s just the way people are. I see that the only way a budget could decrease is if we spend less money, because people really hate paying higher taxes, and it is also bad for the economy to raise taxes.
Explain the Budgetary Process, and mention its most important “players”.
What was the reasoning of the Supreme Court that made an income tax unconstitutional without an amendment?
How does the president get paid? By our taxes?
The president gets paid by our individual income taxes, corporation income taxes, excise taxes, and social insurance taxes. Congress doesn’t differentiate between the different parts of the revenue distribution. They dip into social security all the time. They give the president his salary, his expense account, White House staff expenses, entertainment expenses, another entertainment expense account, travelling expenses, and unanticipated needs expenses, all as dictated by the Treasury and General Appropriations Act.
What is incrementalism?
What are some examples of Uncontrollable Expenditures?
What does the OMB do and how does this affect the President’s budget?
What was the prupose of Gramm-Rudman-Hollings?
Officially called the Balanced Budget and Emergency Deficit Control Act of 1985, U.S. budget deficit reduction measure. The law provided for automatic spending cuts to take effect if the president and Congress failed to reach established targets; the U.S. comptroller general was given the right to order spending cuts. Because the automatic cuts were declared unconstitutional, a revised version of the act was passed in 1987; it failed to result in reduced deficits. By the 1990’s the idea was lost and wasn’t pushed anymore.
What are two conditions associated with our governements grwoth? Explain.
Other than being expenditures, what is net interest?
What is the difference between medicare and medicaid?
Medicare and Medicaid are a couple of Johnson’s legislative achievements in 1965-66 during his “Great Society.” Medicare is a health insurance program for those 65 and older. It was added to the Social Security system to provide elders hospitalization insurance, and inexpensive coverage for doctor fees and other health related expenses. Medicaid is government paid health care for the poor and disabled which is also under the Social Security system.
What is the difference between an authorization bill and an appropriations bill?
An authorization bill by definition is an act of Congress that establishes, continues, or changes a discretionary government program or entitlement.
An appropriations bill by definition is an act of Congress that actually funds programs within limits established by authorization bills. (these usually cover one year).
Explain Keynesian economics, supply-side economics, and monetarism.
What are some examples of entitlements?
In addition to Meagan Barnes’ answer to “What would be the problems with a balanced budget amendment?”
Another problem of the balanced budget amendment would be that it would decrease needed flexibility in times of crisis. Beginning with the $700 billion “TARP” bailout, the U.S. Government has made bailout commitments of $9.1 trillion and spent $2.1 trillion. These bailouts, in the minds of many, have helped prevent a world-wide economic crash and the subsequent global depression. With a balanced budget amendment in place, I highly doubt the government would be able to dish out this kind of money. Sometimes money is the only option in times of crisis; having a balanced budget amendment would greatly inhibit our country’s ability to respond to these situations.
What was Reagan’s massive tax simplification plan?
(also I would really like to know who signs the Presidents pay-checks)
Question: What is the difference between Uncontrollable Expenditures and Entitlements? What is the difference between medicare and medicaid?
Answer:
Uncontrollable Expenditures are expenditures that are determined not be a fixed amount of money set up by congress, but by how many eligible beneficiaries there are for a program. For example, medicare, which is a federal program that pays for certain health benefits for people 65 and older. This is an uncontrollable expenditure because the number of 65 year olds in the system is constantly changing. Therefore, there is no set amount of money and it’s expenditures are based upon how many people there are. This would also be medicaid, which is medical care for those who can’t afford it. This number is always changing.
Entitlements are policies Congress has obligated itself to pay X level of benefits to Y number of recipeints. This would be like Social Security. The government has promised us that when we grow older, we will be entitled to Social Security benefits. Therefore, they have to continue paying the certain benefits to the number of recipeints.
What is reconciliation and when is it usually done in the budgetary process?
At this point, what are the chances of us getting our debts paid off? I know that having debt, might not sound like a good idea, actually helps our country out. What would be perks of being a completely debt free country v. having all these other countries invested in ours?
What are examples of tax expenditures?
What did the Tax Reform Act of 1986 do?
Q. What was Reagan’s massive tax simplification plan?
A. In the early 1980’s Reagan decided 15 tax brackets was just too many so he got rid of them and left 2. a 15% income tax and a 28% income tax.
What is Incrementalism?
Q. What is incrementalism?
A. Incrementalism simply means that the best predictor of our budget this year will be last year’s budget plus a little bit more. “Most of the budget is a product of previous decisions.” And as a result of incrementalism, much of the federal budget has become “uncontrollable.”
Q. What are some examples of Uncontrollable Expenditures?
A. Uncontrollable expenditures are not determined by a fixed appropiated amount of money, but rather are determined by how many eligible beneficiaries there are for a program or by previous obligations of the government. Two-thirds of the budget accounts for these uncontrollable expenditures. The biggest example of this is the Social Securiy system and also Medicare. This costs more than $600 billion per year. And unfortunately for us youngins who have to pay taxes so that more and more grandpas can sit on their couch becoming more and more liberal per day, this means that this expenditure will become more and more “uncontrollable.”
What are some examples of entitlements?
An entitlement is anything that a person may be able to claim. Social Security is one such thing, once a person reaches an age set by the government they will receive Social Security benefits. Retirement payments work much the same way, those who spend enough time at the company may retire and receive a pension. Those who lose someone in the Armed Services are entitle to receive a pension from the government as well.
What are some examples of tax loopholes and why aren’t these unconstitutional?
How can Congress use the budgetary process to control bureaucracies?
Q: What is incrementalism?
A: Incrementalism is the belief that the best way to predict the following years budget is to examine the previous years budget, and then add a little bit more. You add a small fraction, or an “increment” to best place the following years total budget.
- – this is one of the contributing factors to our nations growing national debt. We are constantly spending, and then spending even more in the years to come becuase of incrementalism (and other factors of course). The government never cuts spending or LOWERS the budget by an increment, rather, they always add.
Explain Keynesian economics, supply-side economics, and monetarism.
A- Keynesian economics is the “total spending” theory or economics. Its the round about theory that basically says, if you spend it, it will become someones paycheck. Supply-side economics deals with the supply/production side of economics and monetarism deals with the money aspect of the economy. Currency, form of a coin, etc.
What is the difference between controlled expenditures and uncontrolled?
What is incrementalism?
Well, my friend, incrementalism would be the budget of the previous year and then a little more>>> an increment!
They take a little look at the revenue that came in and base the increment on that.
If we have such a huge national debt, how can we spend money we don’t have?
Doesn’t this just cause inflation?
What is reconciliation and when is it usually done in the budgetary process?
Reconciliation is when Congress tinkers with the budgets of programs to save money so they can spend more in other places. This generally means tax adjustments or adjustments of other types of revenue. This process usually comes during the end of the budget process.
QUESTION: What is reconciliation and when is it usually done in the budgetary process?
ANSWER:
Reconciliation is part of the process of “Budget Resolution”, or setting a limit on expenditures for a budget. In order to save money and thus meet the budget resolution, laws sometimes need to be made or changed. There are two steps in this process. One, of course, is “reconciliation”. Reconciliation is a process where program authorizations are revised (taxes or other revenue adjustments) to achieve required savings, and usually occurs at the end of the budgetary process.
What is incrementalism?
A model of the decision-making process in government which maintains that decisions are usually made on the basis of relatively small adjustments to the existing situation.
What are some examples of Uncontrollable Expenditures?
Education, military, paid government jobs
How has “reaganonimcs” come back to bite us in the ass? Please explain the paradox in American “deregulation”.
Q: What are uncontrollable expenditures and do they effect the budget of an agency?
A: Uncontrollabe Expenditures are expenditures that are given based on how many eligible beneficiaries there are in a program or by previous government obligation. There is no way to know exactly how many people, X, will be eligible to recieve Y amount of funds.
Yes, Uncontrollable expenditures effect the budget of an agency. The Social Security Administration is a good example of this. The SSA needs to be able to pay social security benefits to everyone recieving them. This means they have to be allotted X amount of dollars in their budget to meet these demands. Thus Uncontrollabe Expenditures effect their budget.
What is a tax expenditure?
…hahahahahahahahahahaha!
Where does government obtain most of its money for the budget besides from Individual taxes and where does the majority of government funding go?
What is incrementalism?
Incrementalism is a decision making process in which small decisions are made that don’t effect much. It pleases the population when not in time of war or domestic crisis. Because in times of war the population is looking for big changes and not minor ones.
What are some examples of Uncontrollable Expenditures?
The majority of Uncontrollable Expenditures come from entitlements. The government has to pay “X level of benefits to Y number of recipients.” Social Security, Medicare/ Medicaid, and National Defense are a few examples.
Why was the Tax Reform Act of 1986 one of the most sweeping alterations in federal tax policy history?
“Question: What is Incrementalism?”
Incrementalism is basically an adage that you can predict the budget of a given government agency on the basis of what last years budget, plus a little bit more. The government constantly grows, and barring enormous changes, an agencies budget won’t drastically change.
And a question of my own.
Who in Congress would handle the process of reconciliation in regard to program authorizations?
What are uncontrollable expenditures and do they effect the budget of an agency?
Uncontrollable expenditures are expenses that the government has no control over, like paying employees or beneficiaries of policies, like military or ex-military pensions. For example, ten cents of every dollar the federal government makes goes to paying the interest on the national debt. Uncontrollable expenditures do not really effect the budget of an agency because an agencies budget comes from the controlled expenditures of the federal government. The only way uncontrollable expenditures could seriously impact the budget of agencies is if the total amount used in uncontrollable expenditures was larger than predicted.
What happens if the President and Congress can’t agree on a budget?
How do the CBO and OMB work together? How do they check each other?
Q: If the government receives a surplus, why wouldn’t they just keep the extra money and put it towards our national debt?
A: The debt is something that should NOT go away. The debt is an investment in our country by our fellow Earth-dwellers. If our debt is of substantial amount, which it is, then our debtors have an interest in our country’s well-being. If America goes, the rest of the world will go with us, America, the home of the biggest consumers. In addition to that, those in office can become more popular by putting that money towards other programs.
Why are the bureaucracies often reffered to as implementors and how do they implement policies?
What happens if the President and Congress can’t agree on a budget?
One of two things will happen. Either there will be a federal government shut down. (Think back to the 90’s when Clinton and Gingrich had their game of “chicken” over the budget.) There is also the option to continue using the previous budget until the problems are resolved.
Would the budget for a new year ever decrease?
According to the theory of incrementalism, no, the budget would never decrease one year from the year before because supposedly the best way to estimate a new years’ budget is by looking at the budget of the previous year and then adding a little bit more. Also, most of the debate and attention of the budget proposal process deals with the proposed increment of the budget, not by how much the budget initially was for.
What is the national security state and what causes it to rise or to fall?
How does the military industrial complex relate to the national security state?
What are the problems with the way that our current system handles Social Security? What changes are most debated and why?
Q.)What are uncontrollable expenditures and do they effect the budget of an agency?
A.)An example of an uncontrollable expenditure would be paying interest on our national debt. %10 of all our revenue goes to paying off just the interest of our debts. Basically uncontrollable expenditures are expenditures that we have no control over, we have to pay the interest of our debts, we do not have a choice in the matter.
Q: What is the difference between controlled expenditures and uncontrolled?
A: The difference between controlled expenditures and uncontrolled expenditures is that congress determines a fixed amount of money for controlled expenditures. For uncontrolled expenditures congress cant set a limit because the limit is determined by the number of eligible beneficiaries or previous obligations of the government. An example of controlled would be social services and the military. Pensions and interest on the national debt would be an example of uncontrolable expenditures.
Q: What was the intention of (and the background behind) the 1935 Social Security Act?
A: SS was intended to provide some sustenance to older Americans to save them from poverty.
It was passed during the great depression, when the care of older people became a greater issue. Prior to this act elderly people had no way to provide for them selves.
Q: How has “reaganonimcs” come back to bite us in the ass?
A: They haven’t.